Topic: EXCHANGE LIQUIDITY: According to CMC's new metric, there ain't much. (Read 224 times)

Web traffic overall numbers can be faked, but there are a bunch of obvious signs that this is the case. For example, take a look at Cointiger's web traffic analytics: https://www.rank2traffic.com/cointiger.com

72% of traffic is from paid referrals, resulting in an extremely high bounce rate of 85% and low engagement.

For legit exchanges like Binance, the numbers are much different: https://www.rank2traffic.com/binance.com

Almost no referral traffic and much higher engagement numbers.

Not a perfect metric by any means, but it is one of the few that cannot be completely manipulated. It is unfortunate that sites like Similarweb are off for some countries, but it is better than nothing.

Thanks for this. Giving less weight to orders that are farther from the mid-price in determining exchange liquidity could work. It's more difficult to game that formula compared to faking the volume. Exchanges can still beat it but it's much riskier on their end and they'll probably need to sacrifice more resources if they want to top the list on CMC.

HitFuckingBTC being number one proves this with ease. How does a universally loathed exchange that no one I've ever come across would willingly visit work its way to the top?

I don't know what the answer is for this problem but whatever it is people will attempt to game it.

So liquidity can be faked but web traffic can't be done so easily?
Everything can be faked, we have fake yt,fv,tw profiles with thousands of web followers, how much do you think it will pump 100k visitors?

Besides, similarweb si a piece of garbage of its own when you go and get stats country by country you will see hilarious rankings, just take a look at Japan or Saudi Arabia., this is because they can only get data from the sources who are willing to tell them (and which can obviously be fake) and from users who install their extensions or app, which again is 1002% biased.

Yeah, liquidity can be gamed, but it comes with a lot of problems, you can't put fake walls continuously and either take hits during dumps or annoy customers that their trade orders haven't been executed or were so at 10% difference. You can fake activity when bots play for a billion 1 cent trade, but what will you do with a fake wall when somebody really wants to dump...take the hit or execute the trade till zero?


Too many...
Every time I visit the reputation section and I see somebody unable to get his money from one exchange in 99% of the cases my first question is, "how the hell did you manage to find this one?", let alone use it and get scammed.

Maybe this new index will be like a serious slap from reality and common sense to some, but ....I lost hope.

I'm not a big fan of this metric. It isn't really any harder to fake liquidity than it is to fake volume. Sure, exchanges will have to figure out exactly what Coinmarketcap looks for in an order book, but this can be done. Just because there appears to be a buy order doesn't mean there is anything actually underlying it. If an exchange is willing to fake their volume, chances are they also will fake their orderbook.

The best metric I've seen for exchange volume is Coingecko's: https://www.coingecko.com/en/exchanges

Assuming you have a pool of accurately reported exchange volumes (not every exchange fakes volume), you can get a fairly good estimate for a site's volume based off its web traffic. Exchanges that have much higher volume than their web traffic suggests are consequently adjusted.

I'm more happy to see the charts of exchanges like this right now, it's better than just ranked by the fake volumes from many exchanges and glad to not see the p2pblabla exchangebis not on the top ranked exchange again. Great work for CMC for the new metrics.

Indeed.
And also, after 50 exchanges, liquidity is non existent. How many "exchanges" are there?


You have to clink either internal link


or go here for further info, but don't expect to see the algo
https://support.coinmarketcap.com/hc/en-us/articles/360035679972-Liquidity

There's a huge difference if you compare the top 10 exchange by liquidity and the top 10 by adjusted volume  .

I can only think of exchanges do some more sophisticated wash trading to beat the liquidity metric for now. I guess we will have a better idea once we see the methodology. As I said in my thread, link is still a blank page.

Like a lot of people, I've long been frustrated by the obviously fantastical volume figures reported by crypto exchanges and passed on by the aggregator sites like CoinMarketCap.
There are many reasons why these incredibly exaggerated figures are harmful to the crypto environment, not least that of general credibility.
Wash trading has become the norm, listing fees are based on lies and investors/traders are deceived into using "bucket shops" with all the risks involved in that.
So, for me anyway, it was high time CMC as market leader got their act together and provided more than the reported/adjusted volume stopgap.
And they seem to have done it, in the shape of the recently deployed Liquidity Metric.


I find this particularly encouraging


The top exchanges by liquidity now look like this



and some back of the envelop math totals the liquidity of the top 50 Exchanges ~$342m today.(outside the top 53 exchanges, I have more liquidity in my back pocket).

My question for you is: How does that sound in relation to a total market cap of ~$234bn and a 24hr volume of ~$58bn?
What inferences, if any, can be drawn regarding the large differences in liquidity/volume ratios in exchanges listed that image above?
And, of course, how can it be gamed?

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